The week ahead will mark the start of a new trading month. With the summer period kicking in, trading is expected to remain subdued. Still, the week ahead is packed with a list of tier-one economic data that will no doubt keep the markets busy.
The Bank of England and the Reserve Bank of Australia will be holding their monetary policy meetings this week. No changes are expected from either of these meetings.
US economic data comes out in full force which includes the ISM manufacturing and non-manufacturing data, as well as Friday’s nonfarm payrolls report for July.
--BoE and the RBA Meetings – Rates to remain steady--
The week starts off with the Reserve Bank of Australia’s monetary policy meeting on Tuesday, August 1. Economists expect to see no changes to the RBA rate which remains steady at 1.50%.
The recent weaker than expected inflation data further adds weight to this view.
Later on, the retail sales numbers will be coming out. Economists are expecting to see the monthly retail sales in Australia rise just 0.2%, slowing from a 0.6% increase the month before.
On Thursday, August 3, the Bank of England will be holding its monthly policy review. Interest rates are expected to remain steady at 0.25%, although we could still expect to see three dissenting votes in favor of a rate hike.
With inflation easing back in June, rising just 2.6%, the BoE could be seen using this as an opportunity to keep rates on hold for a while longer.
However, there is a potential for the MPC to provide a hawkish forward guidance on the future of rate hikes. With the second quarter GDP, posting just a 0.3% increase in GDP, and most of the economic activity coming in through the services sector, the BoE is likely to be compelled to wait for more data before deciding on rate hikes.
Later in the week, the manufacturing, construction, and services PMI data will also be coming out which could bring additional volatility to the British pound.
Read more: https://www.orbex.com/blog/2017/07/fx-week-ahead-rba-boe-meetings-us-payrolls/